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Trade with China, but do it right

The shocking volumes of food being imported into Australia from China rightly has the farming community angry.

The revelations published on FarmOnline last week have brought to the surface long-held frustrations with Australia's pro-free-trade policies.

For decades now, family farmers have expressed anger with the National Farmers' Federation and successive Federal Governments for promoting a free-trade agenda.

They argue that the removal of tariff and subsidy protections have cost farmers their livelihoods, properties and future prospects. It has left our industry competiting on an uneven playing field against producers from the rest of the world.

It is impossible to argue that these have not been the unintended consequences of Australia's quick transition to an open economy, but for some readers to argue that we gain nothing from trading with China, and that protectionist barriers should be put up to stop the flow of Chinese food, is missing the point.

First, Australia needs to trade with China. Some economic forecasters have predicted that within five years the Communist nation will have the largest economy in the world. Thus access to its markets is vital for our future prosperity.

Second, Australia already exports vast quantities of both food and natural resources to China. Without exports of coal and iron ore, the Australian economy would not have enjoyed - until recently - such a golden run.

Third, trade negotiations are a back-scratching exercise. No-one is given anything for nothing, and no country can expect to increase tariffs and subsidies without some form of retaliation.

Thus, fighting back against imports of Chinese food by increasing our import tariffs in order to protect farmers, will undoubtedly have ramifications for Australia's mining exports - we all know that farmers, unfortunately, stand well after miners on the political pecking order at present.

But, that is not to say nothing could and should be done.

The farm sector, as many readers have already pointed out, should be approaching the argument from two angles: food safety, and consumer choice.

On the first point, the time is right, in the wake of the Federal Government's inquiry into quarantine services and the Chinese melamine milk tragedy, to question the adequacy of the testing and screening of food imports into Australia.

Second, product labelling must be improved if consumers, and thus Aussie farmers, are to receive a fair go in the market place.

The processing and retail industry has always argued that this too hard and costly given the myriad of permutations within the food production chain: for example, Australian-made; Australian-grown but overseas processed; Australian-packaged but overseas grown; and contains some Australian and some imported foods.

While there may be some legitimacy to these technical arguments, there is little defence for the size of the small print detailing such information. Nor is there any reason why fresh produce should not contain large, clear signage detailing the country of origin.

These are the areas which farmers should be directing their anger in order to fight Chinese food imports, because lamentably, there's no turning back the clock on our trade agreements.

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Either food is Australian or it is not. The word partly would describe all food in between. A lot less confusion. Country of origin is a consumer's right, not a hocus pocus for supermarkets to pull the wool. Not that they would of course.tut tut.
Posted by interested consumer, 28/01/2009 5:49:43 PM
Well - if we are going to insist on demonizing the Australian producers of crops which require irrigation, we will have to get our fruit and vegies from somewhere else won't we. I hear from city people comments like "...why don't we grow (irrigrated crops) somewhere where it rains instead of wasting water by irrigrating them". Great idea, pity about the practicalities of disease and pest control! But they still expect to buy premium grade blemish-free fruit and vegs.
Posted by AJ, 29/01/2009 8:46:19 AM
Of course trade goes both ways but if we must trade, then trade products not produce. They have 1.3 billion to feed so they can keep their food and let us keep our quality food here. I have been through out Asia, and I will never eat Chinese grown food fresh, frozen, canned whatever.
Posted by Aussie, 29/01/2009 9:45:59 AM
To take the tiger cub first you must enter the tiger den.
Posted by THE FARMER, 29/01/2009 10:57:35 AM
We will only know if the use of the word 'shocking' is appropriate to this story when you tell us what percentage of the total market the imports from China represent. You may also wish to turn your attention to Asparagus that we import, by air I believe, from Peru - what is the cost of labour in in Peru? Why do we import brown onions and potato chips from the United States of America? And oranges? Kiwi Friuit from Mexico? Sweet corn from Thailand. Salt from South Africa for goodness sake...The list goes on. China is depicted as the bad guy, but like it or not, we have allowed ourselves to become dependent on them. It's not just the resources sector either, without China it is doubtful whether we would have a wool industry. All in all, I think the language in the article is unnecessarily jingoistic and emotional, it is inflamatory, it is poorly constructed and factually unbalanced and designed to do nothing more than incite an emotional response. Which, like its predecessor, it will undoubtedly do.
Posted by Roger Crook, 30/01/2009 7:06:39 AM
As an avocado grower I think there is a lot avo growers can do to be more competitive, nationally and internationally, chiefly by investing more in R + D and in marketing. I think it is generally agreed that Avocados Australia Ltd is one of the best commodity governing bodies, but all growers should be supporting it. Similarly, farmers should be generously supporting Growcom, while they do not then they cannot complain.
Posted by frank and alice, 30/01/2009 7:16:03 AM
Why have there been so many stories in Rural Press about Chinese imports/trade lately? Last time I looked, Chinese ag imports were insignificant (10%) compared to Aust ag exports (>US$3 billion). Make no mistake, without trade with China, we don't have a wool industry. Compared to China, which has hundreds of millions of poor, small farmers that will be impacted by more open agricultural trade, Australian problems are miniscule / a problem created by self-interested ag lobby groups.
Posted by SW, 30/01/2009 11:04:33 AM
Good luck, Australian public. You are going to reap what you have sown with your 'she'll be right cobber' naivety to what is occuring in your own back yard.
Posted by Halliburtrothfeller, 2/02/2009 9:48:31 AM
I have been patiently waiting for the anti-free traders to scream their ill-informed self-serving voodoo economics at Michael Thomson's excellent analysis. For sections of the Australian primary industry sector to demand protection against imports is laughable, hypocritical and ironic in the extreme. Are the anti-free traders so ignorant of basic economics that they believe they should have (or even that it is possible to have) free access to foreign markets whilst making (by artificial imposts, some explicit, some hidden) imports so expensive that they cannot compete? As I have said before, this brigade should sit down, put aside total self-interest for ten minutes, and have a good hard think, or alternatively, if thinking is too hard, review an "Economics for Dummies" type book at their local library. The whole point of free trade is to provide consumers with their needs at the lowest possible price, and to increase wealth both nationally and globally. Even the most economically illiterate or ideologically driven would have to concede this has happened over the last two decades in Australia.

Some comments on Mr. Thomson's article: Altering labelling will only increase costs. It will not make the slightest measurable difference in macro terms to the pattern of consumer spending. Michael Thomson does not refer to the consumer at any point in his article - an oversight I find more prevalent in anti-trade blurb. There are more consumers than farmers, or any other vested interest group in Australia, and they will make their consumer decisions based essentially on value for money. When they walk down the supermarket aisles, the vast majority have nothing more than a passing interest in point of origin. They will be essentially motivated by price. Anti-free traders should remember that a $1 benefit to Australian consumers (all residents of Australia) provides a larger net benefit to the nation than $50 to every employee in primary industries. Farmers want to appeal to nice nationalistic sentiments when it serves their interests, but do they (for example) buy Australian-made vehicles, even when they are more expensive, less reliable and more suitable than foreign owned and/or made vehicles? Of course they do not! They make sensible economic decisions and buy the best vehicle for the job, exactly as they should. Why do they expect consumers to behave any differently to the way they themselves behave? The anti-free traders are highly hypocritical.

Posted by Bushie Bill, 3/02/2009 10:07:17 AM
people pushing the free trade agenda surely must know that the "playing field" will not be level until everything is on it. this will include wages and salaries, luxuries like "occupational health an safety" and a plethora of other things we take for granted in this country. anyone who thinks we can be half economic rationalist and keep the protections we like, is currently being shown to be sadly mistaken.
Posted by rod, 5/02/2009 9:17:56 PM
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Michael Thomson is the Editor of FarmOnline. He has previously worked as the Canberra Parliamentary Press Gallery correspondent for the Rural Press group of agricultural newspapers, and as a senior reporter with Queensland Country Life.
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